Chester dodges tax hike, ends '12 with surplus

CHESTER -- City council approved its 2013 budget Wednesday, adopting a $47.17 million spending plan that holds the line on all city taxes.

Councilman Nafis Nichols also announced that the city projects to finish 2012 with a surplus despite having to incur an arbitration award to the firefighters union.

Nichols estimated the surplus would be $90,000, but said he would have an exact figure Friday. The surplus would have been higher, Nichols said, but the firefighters' arbitration award significantly increased the city's expenses.

That package cost the city an additional $2.4 million and included retroactive wage increases being spread across the 2012 and 2013 budgets, Nichols previously said.

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In late November, Nichols had projected the city would conclude the year with a deficit. Nichols said Wednesday the city had taken various measures to cut expenses, but also gained some unanticipated revenue from a pilot program and other sources.

"Santa came early this year," Nichols said. "We got a couple of unexpected things and it helped us."

As for 2013, the all-Democratic council passed the budget by a 4-0 vote. Councilwoman Elizabeth Williams was not present.

Mayor John Linder said there is a possibility that the city could reopen the budget in the new year, but "this is the best reading at this point."

The budget's bottom line increased by nearly $4 million from last year's $43.32 million total despite taxes holding steady.

Nichols said the bottom line typically increases by about $1.5 million to $2 million each year. It jumped nearly $4 million this year, he said, because the city anticipates receiving $1.93 million in additional revenue from a general obligation note. That revenue will not be there in 2014, he said.

The real estate tax remains at 29.792 mills, which equates to about $536 in taxes on a house assessed at $18,000. The same household also would pay $27 in library taxes, slated at a rate of 1.5 mills.

The budget also keeps the city's earned income tax rate for residents at 2.15 percent and its rate for nonresidents at 1.15 percent. The business privilege tax remains at 3.65 mills for retail and services businesses. It stays at 2.74 mills for wholesale businesses.

Nichols said health insurance costs and the new police and fire department contracts were the biggest proponents in pushing the city's expenses upward.

He said city officials have examined ordinances to see whether revenue can be generated by increasing various service fees so that they are comparable to other local municipalities.

Nichols said the expenses in the final budget differed slightly from the preliminary budget passed earlier this month. The differences reflected updated insurance premiums, personnel increases and a $225,000 decrease in funding for the Chester Economic Development Authority. The preliminary budget had allocated $425,000 to CEDA.

"That's being strategic in how we do things and them really looking at what they need to do over there to kind of shape some things up," Nichols said of the CEDA line item. "We're just working hard and diligently together to see what was a need and what was a want."

The budget projects the city will receive $8.1 million in real estate taxes, $10.4 million in Act 511 taxes, $8.6 million in intergovernmental revenues, $7.15 million in service charges and $7.09 million in interests, rents and royalties. Reimbursements, licenses, permits and fines account for much of the remaining projected revenue.

The budget allocates $19.59 million to the Department of Public Affairs, which includes the police department, and $11.31 million to the Department of Accounts and Finance.

The Department of Safety, which includes the fire department, will receive $9.2 million.

The remaining revenue is allocated for the Department of Streets and Highways, the Department of Parks and Public Property and operating transfers.